Bill Text: IN HB1088 | 2012 | Regular Session | Introduced
Bill Title: County and municipal income taxes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-01-09 - First reading: referred to Committee on Ways and Means [HB1088 Detail]
Download: Indiana-2012-HB1088-Introduced.html
Citations Affected: IC 6-3-4-17; IC 6-3.5; IC 6-8.1.
Synopsis: County and municipal income taxes. Allows a county to use
an additional county adjusted gross income tax rate or county option
income tax rate to reduce all property tax levies imposed by the county
by granting property tax replacement credits against those property tax
levies to all taxpayers. Allows a municipality to adopt a municipal
income tax if the municipality is located in such a county. Requires an
adopting municipality to provide property tax relief for property owners
in the municipality by freezing the levy or providing general property
tax replacement credits, homestead credits, or local property tax
replacement credits for residential property, or any combination of the
permitted forms of relief. Provides that the maximum municipal option
income tax rate is the rate specified for the reduction of the county
levies. Provides that the combined municipal and county rates may not
exceed 1%. Requires the department of state revenue to include on the
adjusted gross income tax return a requirement that the taxpayer
identify the city or town, if any, where the taxpayer's principal place of
residence is located.
Effective: July 1, 2012.
January 4, 2012, read first time and referred to Committee on Ways and Means.
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A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
(1) develop a quarterly report that summarizes the amount reported to and processed by the department under section 4.1(h) of this chapter, section 15.7(a)(3) of this chapter, IC 6-3.5-1.1-18(c), IC 6-3.5-6-22(c), and IC 6-3.5-7-18(c) for each county; and
(2) make the quarterly report available to county auditors within forty-five (45) days after the end of the calendar quarter.
(b) Beginning after December 31, 2013, the department and the office of management and budget shall:
(1) develop a quarterly report that summarizes the amount reported to and processed by the department under IC 6-3.5-10-22(c) for each city and town; and
(2) make the quarterly report available to city and town fiscal
officers within forty-five (45) days after the end of the
calendar quarter.
(b) A tax rate under this section may be imposed in increments of five hundredths of one percent (0.05%) determined by the county council. Except as provided in subsection (f)(5), a tax rate under this section may not exceed one percent (1%). The sum of the tax rates imposed:
(1) by a county under this section; and
(2) by a municipality located in the county under IC 6-3.5-10;
may not exceed one percent (1%).
(c) A tax rate under this section is in addition to any other tax rates imposed under this chapter and does not affect the purposes for which other tax revenue under this chapter may be used.
(d) If a county council adopts an ordinance to impose or increase a tax rate under this section, the county auditor shall send a certified copy of the ordinance to the department and the department of local government finance by certified mail.
(e) A tax rate under this section may be imposed, increased, decreased, or rescinded by a county council at the same time and in the same manner that the county council may impose or increase a tax rate under section 24 of this chapter.
(f) Tax revenue attributable to a tax rate under this section may be used for any combination of the following purposes, as specified by ordinance of the county council:
(1) Except as provided in subsection (j), the tax revenue may be used to provide local property tax replacement credits at a uniform rate to all taxpayers in the county. The local property tax replacement credits shall be treated for all purposes as property tax levies. The county auditor shall determine the local property tax replacement credit percentage for a particular year based on the amount of tax revenue that will be used under this subdivision to provide local property tax replacement credits in that year. A county council may not adopt an ordinance determining that tax revenue shall be used under this subdivision to provide local property tax replacement credits at a uniform rate to all taxpayers in the county unless the county council has done the following:
(A) Made available to the public the county council's best estimate of the amount of property tax replacement credits to be provided under this subdivision to homesteads, other residential property, commercial property, industrial property, and agricultural property.
(B) Adopted a resolution or other statement acknowledging that some taxpayers in the county that do not pay the tax rate under this section will receive a property tax replacement credit that is funded with tax revenue from the tax rate under this section.
(2) The tax revenue may be used to uniformly provide the homestead credit percentage in the county. The homestead credits shall be treated for all purposes as property tax levies. The homestead credits do not reduce the basis for determining any state homestead credit. The homestead credits shall be applied to the net property taxes due on the homestead after the application of all other assessed value deductions or property tax deductions and credits that apply to the amount owed under IC 6-1.1. The county auditor shall determine the homestead credit percentage for a particular year based on the amount of tax revenue that will be used under this subdivision to provide homestead credits in that year.
(3) The tax revenue may be used to provide local property tax replacement credits at a uniform rate for all qualified residential property (as defined in IC 6-1.1-20.6-4 before January 1, 2009, and as defined in section 1 of this chapter after December 31, 2008) in the county. The local property tax replacement credits shall be treated for all purposes as property tax levies. The county auditor shall determine the local property tax replacement credit percentage for a particular year based on the amount of tax revenue that will be used under this subdivision to provide local property tax replacement credits in that year.
(4) This subdivision applies only to Lake County. The Lake County council may adopt an ordinance providing that the tax revenue from the tax rate under this section is used for any of the following:
(A) To reduce all property tax levies imposed by the county by the granting of property tax replacement credits against those property tax levies.
(B) To provide local property tax replacement credits in Lake County in the following manner:
(i) The tax revenue under this section that is collected from
taxpayers within a particular municipality in Lake County
(as determined by the department based on the department's
best estimate) shall be used only to provide a local property
tax credit against property taxes imposed by that
municipality.
(ii) The tax revenue under this section that is collected from
taxpayers within the unincorporated area of Lake County (as
determined by the department) shall be used only to provide
a local property tax credit against property taxes imposed by
the county. The local property tax credit for the
unincorporated area of Lake County shall be available only
to those taxpayers within the unincorporated area of the
county.
(C) To provide property tax credits in the following manner:
(i) Sixty percent (60%) of the tax revenue under this section
shall be used as provided in clause (B).
(ii) Forty percent (40%) of the tax revenue under this section
shall be used to provide property tax replacement credits
against property tax levies of the county and each township
and municipality in the county. The percentage of the tax
revenue distributed under this item that shall be used as
credits against the county's levies or against a particular
township's or municipality's levies is equal to the percentage
determined by dividing the population of the county,
township, or municipality by the sum of the total population
of the county, each township in the county, and each
municipality in the county.
The Lake County council shall determine whether the credits
under clause (A), (B), or (C) shall be provided to homesteads, to
all qualified residential property, or to all taxpayers. The
department of local government finance, with the assistance of the
budget agency, shall certify to the county auditor and the fiscal
body of the county and each township and municipality in the
county the amount of property tax credits under this subdivision.
Except as provided in subsection (g), the tax revenue under this
section that is used to provide credits under this subdivision shall
be treated for all purposes as property tax levies.
(5) The tax revenue may be used to reduce all property tax
levies imposed by the county by granting property tax
replacement credits against those property tax levies to all
taxpayers. The tax revenue under this section that is used to
provide property tax replacement credits under this
subdivision shall be treated for all purposes as property tax
levies. The following apply if a county uses tax revenue to
provide property tax replacement credits under this
subdivision:
(A) The additional tax rate that may be used for this
purpose must be specified by the ordinance of the county
council.
(B) The additional tax rate that may be used for this
purpose may not exceed five-tenths of one percent (0.5%).
(C) The sum of all additional tax rates imposed under this
section for all purposes permitted by this subsection may
not exceed five-tenths of one percent (0.5%).
The county council may adopt an ordinance changing the purposes for
which tax revenue attributable to a tax rate under this section shall be
used in the following year.
(g) The tax rate under this section and the tax revenue attributable
to the tax rate under this section shall not be considered for purposes
of computing:
(1) the maximum income tax rate that may be imposed in a county
under section 2 of this chapter or any other provision of this
chapter;
(2) the maximum permissible property tax levy under
IC 6-1.1-18.5-3; or
(3) the credit under IC 6-1.1-20.6.
(h) Tax revenue under this section shall be treated as a part of the
receiving civil taxing unit's or school corporation's property tax levy for
that year for purposes of fixing the budget of the civil taxing unit or
school corporation and for determining the distribution of taxes that are
distributed on the basis of property tax levies. To the extent the county
auditor determines that there is income tax revenue remaining from the
tax under this section after providing the property tax replacement
credits, the excess shall be credited to a dedicated county account and
may be used only for property tax replacement credits under this
section in subsequent years.
(i) The department of local government finance and the department
of state revenue may take any actions necessary to carry out the
purposes of this section.
(j) A taxpayer that owns an industrial plant located in Jasper County
is ineligible for a local property tax replacement credit under this
section against the property taxes due on the industrial plant if the
assessed value of the industrial plant as of March 1, 2006, exceeds
twenty percent (20%) of the total assessed value of all taxable property
in the county on that date. The general assembly finds that the
provisions of this subsection are necessary because the industrial plant
represents such a large percentage of Jasper County's assessed
valuation.
(b) The budget agency shall, before July 1 of each year, jointly calculate the municipal option income tax rate (as applicable) that must be imposed in a county to raise income tax revenue in the following year equal to the result of:
(1) the department of local government finance's estimate of maximum permissible ad valorem property tax levies calculated under IC 6-1.1-18.5 for the municipality for the ensuing calendar year; minus
(2) the maximum permissible ad valorem property tax levy calculated under IC 6-1.1-18.5 for the municipality for the current calendar year.
(c) In the case of a municipality that wishes to use tax revenue received under IC 6-3.5-10 to freeze its levy for the first time, the department of local government finance and the budget agency shall jointly estimate the amount that will be calculated under subsection (b) in the second year after the tax rate is first imposed. The department of local government finance and the budget agency shall calculate the tax rate under IC 6-3.5-10 that must be imposed in the municipality in the second year after the tax rate is first imposed to raise income tax revenue equal to the estimate under this subsection.
(d) The budget agency and the department of local government finance shall make the calculations under subsections (b) and (c) based on the best information available at the time the calculation is made.
(b) A tax rate under this section may be imposed in increments of five-hundredths of one percent (0.05%) determined by the county income tax council. Except as provided in subsection (f)(5), a tax rate
under this section may not exceed one percent (1%). The sum of the
tax rates imposed:
(1) by a county under this section; and
(2) by a municipality located in the county under IC 6-3.5-10;
may not exceed one percent (1%).
(c) A tax rate under this section is in addition to any other tax rates
imposed under this chapter and does not affect the purposes for which
other tax revenue under this chapter may be used.
(d) If a county income tax council adopts an ordinance to impose or
increase a tax rate under this section, the county auditor shall send a
certified copy of the ordinance to the department, the budget agency,
and the department of local government finance by certified mail.
(e) A tax rate under this section may be imposed, increased,
decreased, or rescinded at the same time and in the same manner that
the county income tax council may impose or increase a tax rate under
section 30 of this chapter.
(f) Tax revenue attributable to a tax rate under this section may be
used for any combination of the following purposes, as specified by
ordinance of the county income tax council:
(1) The tax revenue may be used to provide local property tax
replacement credits at a uniform rate to all taxpayers in the
county. The local property tax replacement credits shall be treated
for all purposes as property tax levies. The county auditor shall
determine the local property tax replacement credit percentage for
a particular year based on the amount of tax revenue that will be
used under this subdivision to provide local property tax
replacement credits in that year. A county income tax council may
not adopt an ordinance determining that tax revenue shall be used
under this subdivision to provide local property tax replacement
credits at a uniform rate to all taxpayers in the county unless the
county council has done the following:
(A) Made available to the public the county council's best
estimate of the amount of property tax replacement credits to
be provided under this subdivision to homesteads, other
residential property, commercial property, industrial property,
and agricultural property.
(B) Adopted a resolution or other statement acknowledging
that some taxpayers in the county that do not pay the tax rate
under this section will receive a property tax replacement
credit that is funded with tax revenue from the tax rate under
this section.
(2) The tax revenue may be used to uniformly increase (before
January 1, 2011) or uniformly provide (after December 31, 2010)
the homestead credit percentage in the county. The homestead
credits shall be treated for all purposes as property tax levies. The
homestead credits do not reduce the basis for determining any
state homestead credit. The homestead credits shall be applied to
the net property taxes due on the homestead after the application
of all other assessed value deductions or property tax deductions
and credits that apply to the amount owed under IC 6-1.1. The
county auditor shall determine the homestead credit percentage
for a particular year based on the amount of tax revenue that will
be used under this subdivision to provide homestead credits in
that year.
(3) The tax revenue may be used to provide local property tax
replacement credits at a uniform rate for all qualified residential
property (as defined in IC 6-1.1-20.6-4 before January 1, 2009,
and as defined in section 1 of this chapter after December 31,
2008) in the county. The local property tax replacement credits
shall be treated for all purposes as property tax levies. The county
auditor shall determine the local property tax replacement credit
percentage for a particular year based on the amount of tax
revenue that will be used under this subdivision to provide local
property tax replacement credits in that year.
(4) This subdivision applies only to Lake County. The Lake
County council may adopt an ordinance providing that the tax
revenue from the tax rate under this section is used for any of the
following:
(A) To reduce all property tax levies imposed by the county by
the granting of property tax replacement credits against those
property tax levies.
(B) To provide local property tax replacement credits in Lake
County in the following manner:
(i) The tax revenue under this section that is collected from
taxpayers within a particular municipality in Lake County
(as determined by the department based on the department's
best estimate) shall be used only to provide a local property
tax credit against property taxes imposed by that
municipality.
(ii) The tax revenue under this section that is collected from
taxpayers within the unincorporated area of Lake County (as
determined by the department) shall be used only to provide
a local property tax credit against property taxes imposed by
the county. The local property tax credit for the
unincorporated area of Lake County shall be available only
to those taxpayers within the unincorporated area of the
county.
(C) To provide property tax credits in the following manner:
(i) Sixty percent (60%) of the tax revenue under this section
shall be used as provided in clause (B).
(ii) Forty percent (40%) of the tax revenue under this section
shall be used to provide property tax replacement credits
against property tax levies of the county and each township
and municipality in the county. The percentage of the tax
revenue distributed under this item that shall be used as
credits against the county's levies or against a particular
township's or municipality's levies is equal to the percentage
determined by dividing the population of the county,
township, or municipality by the sum of the total population
of the county, each township in the county, and each
municipality in the county.
The Lake County council shall determine whether the credits
under clause (A), (B), or (C) shall be provided to homesteads, to
all qualified residential property, or to all taxpayers. The
department of local government finance, with the assistance of the
budget agency, shall certify to the county auditor and the fiscal
body of the county and each township and municipality in the
county the amount of property tax credits under this subdivision.
Except as provided in subsection (g), the tax revenue under this
section that is used to provide credits under this subdivision shall
be treated for all purposes as property tax levies.
(5) The tax revenue may be used to reduce all property tax
levies imposed by the county by granting property tax
replacement credits against those property tax levies to all
taxpayers. The tax revenue under this section that is used to
provide property tax replacement credits under this
subdivision shall be treated for all purposes as property tax
levies. The following apply if a county uses tax revenue to
provide property tax replacement credits under this
subdivision:
(A) The additional tax rate that may be used for this
purpose must be specified by the ordinance of the county
income tax council.
(B) The additional tax rate that may be used for this
purpose may not exceed five-tenths of one percent (0.5%).
(C) The sum of all additional tax rates imposed under this
section for all purposes permitted by this subsection may
not exceed five-tenths of one percent (0.5%).
The county income tax council may adopt an ordinance changing the
purposes for which tax revenue attributable to a tax rate under this
section shall be used in the following year.
(g) The tax rate under this section shall not be considered for
purposes of computing:
(1) the maximum income tax rate that may be imposed in a county
under section 8 or 9 of this chapter or any other provision of this
chapter;
(2) the maximum permissible property tax levy under
IC 6-1.1-18.5-3; or
(3) the credit under IC 6-1.1-20.6.
(h) Tax revenue under this section shall be treated as a part of the
receiving civil taxing unit's or school corporation's property tax levy for
that year for purposes of fixing the budget of the civil taxing unit or
school corporation and for determining the distribution of taxes that are
distributed on the basis of property tax levies. To the extent the county
auditor determines that there is income tax revenue remaining from the
tax under this section after providing the property tax replacement, the
excess shall be credited to a dedicated county account and may be used
only for property tax replacement under this section in subsequent
years.
(i) The department of local government finance, and the department
of state revenue may take any actions necessary to carry out the
purposes of this section.
(j) Notwithstanding any other provision, in Lake County the county
council (and not the county income tax council) is the entity authorized
to take actions concerning the tax rate under this section.
Chapter 10. Municipal Option Income Tax
Sec. 1. This chapter applies to a municipality located in a county that does both of the following:
(1) Adopts an additional tax rate under one (1) of the following:
(A) IC 6-3.5-1.1-26.
(B) IC 6-3.5-6-32.
(2) Specifies by ordinance that all or part of the additional tax rate will be used for the purpose specified by one (1) of the following:
(A) IC 6-3.5-1.1-26(f)(5).
(B) IC 6-3.5-6-32(f)(5).
Sec. 1.5. (a) A power granted by this chapter to adopt an ordinance to:
(1) impose, increase, decrease, or rescind a tax or tax rate; or
(2) grant, increase, decrease, rescind, or change a homestead credit or property tax replacement credit authorized under this chapter;
may be exercised at any time in a year before November 1 of that year.
(b) An ordinance authorized by this chapter that imposes or increases a tax or a tax rate takes effect as follows:
(1) An ordinance adopted after December 31 of the immediately preceding year and before October 1 of the current year takes effect October 1 of the current year.
(2) An ordinance adopted after September 30 and before October 16 of the current year takes effect November 1 of the current year.
(3) An ordinance adopted after October 15 and before November 1 of the current year takes effect December 1 of the current year.
(c) An ordinance authorized by this chapter that decreases or rescinds a tax or a tax rate takes effect as follows:
(1) An ordinance adopted after December 31 of the immediately preceding year and before October 1 of the current year takes effect on the later of October 1 of the current year or the first day of the month in the current year as the month in which the last increase in the tax or tax rate occurred.
(2) An ordinance adopted after September 30 and before October 16 of the current year takes effect on the later of November 1 of the current year or the first day of the month in which the last increase in the tax or tax rate occurred.
(3) An ordinance adopted after October 15 and before November 1 of the current year takes effect December 1 of the current year.
(d) An ordinance authorized by this chapter that grants, increases, decreases, rescinds, or changes a homestead credit or property tax replacement credit authorized under this chapter takes effect for and applies to property taxes first due and payable in the year immediately following the year in which the ordinance is adopted.
Sec. 2. As used in this chapter, "adjusted gross income" has the meaning set forth in IC 6-3-1-3.5.
Sec. 3. As used in this chapter, "department" refers to the department of state revenue.
Sec. 4. As used in this chapter, "fiscal body" means:
(1) the common council, for a city; and
(2) the town council, for a town.
Sec. 5. As used in this chapter, "municipal option income tax" refers to the tax authorized by this chapter.
Sec. 6. As used in this chapter, "municipal taxpayer", as the term relates to a particular municipality, means any individual who resides in that municipality on the date specified in section 18 of this chapter.
Sec. 7. As used in this chapter, "municipality" means a city or town.
Sec. 8. (a) The fiscal body of a municipality may adopt an ordinance to impose a municipal option income tax on the adjusted gross income of municipal taxpayers as provided in section 10 of this chapter.
(b) A fiscal body shall hold at least one (1) public hearing on the proposed ordinance before the public hearing at which an ordinance is adopted under subsection (a). The fiscal body shall give public notice of the public hearing under IC 5-3-1.
Sec. 9. (a) The municipal option income tax may be imposed on the adjusted gross income of municipal taxpayers in increments of five-hundredths of one percent (0.05%). However, the tax rate may not exceed the lesser of the following:
(1) The additional tax rate imposed by the county in which the municipality is located under either of the following:
(A) IC 6-3.5-1.1-26(f)(5).
(B) IC 6-3.5-6-32(f)(5).
(2) Five-tenths of one percent (0.5%).
(b) The sum of the tax rates imposed:
(1) by a municipality under this chapter; and
(2) by the county in which the municipality is located under IC 6-3.5-1.1-26(f)(5) or IC 6-3.5-6-32(f)(5);
may not exceed one percent (1%).
Sec. 10. To impose a municipal option income tax, the fiscal body of a municipality must adopt an ordinance. The ordinance must state substantially the following:
"The ________ (insert name of municipality) ________ (insert City or Town) Council imposes the municipal option income
tax on the residents of ________ (insert name of municipality).
The income tax is imposed at a rate of _____ percent
(_____%).".
Sec. 11. (a) The fiscal body of a municipality may increase or
decrease the rate of a municipal option income tax. To increase or
decrease the rate, the fiscal body must adopt an ordinance. The
ordinance must state substantially the following:
"The ________ (insert name of municipality) ________ (insert
City or Town) Council increases (or decreases) the rate of the
municipal option income tax. The tax rate is increased (or
decreased) from (insert current rate) to (insert proposed
rate).".
(b) A fiscal body shall hold at least one (1) public hearing on the
proposed ordinance before the public hearing at which the
ordinance is adopted under subsection (a). The fiscal body shall
give public notice of the public hearing under IC 5-3-1.
Sec. 12. (a) The fiscal body of a municipality may rescind the
municipal option income tax by adopting an ordinance to rescind
the tax.
(b) A fiscal body shall hold at least one (1) public hearing on the
proposed ordinance before the public hearing at which the
ordinance is adopted under subsection (a). The fiscal body shall
give public notice of the public hearing under IC 5-3-1.
Sec. 13. A municipal option income tax remains in effect until
the date the tax is rescinded.
Sec. 14. Immediately upon adoption of any ordinance under this
chapter, the fiscal officer of the municipality shall send a certified
copy of the ordinance to the department by certified mail.
Sec. 15. (a) Revenue derived from the imposition of the
municipal option income tax shall, in the manner prescribed by this
section, be distributed to the municipality that imposed it.
(b) Before August 2 of each calendar year, the budget agency
shall certify to the fiscal officer of each adopting municipality the
amount of municipal option income tax revenue that the budget
agency determines has been:
(1) received from municipal taxpayers of that municipality for
the taxable year ending before the calendar year in which the
determination is made; and
(2) reported on annual returns or amended returns processed
by the department in the state fiscal year ending before July
1 of the calendar year in which the determination is made;
as adjusted for refunds of municipal option income tax made in the
state fiscal year plus the amount of interest in the municipality's
account that has accrued and has not been included in a
certification made in a preceding year. The amount certified is the
municipality's certified distribution for the following calendar
year.
(c) The amount certified under subsection (b) shall be adjusted
under subsections (d), (e), and (f). The budget agency shall provide
each municipality's fiscal body with an informative summary of the
calculations used to determine the certified distribution. The
summary of calculations must include:
(1) the amount reported on individual income tax returns
processed by the department during the previous fiscal year;
(2) adjustments for overdistributions in prior years;
(3) adjustments for clerical or mathematical errors in prior
years;
(4) adjustments for tax rate changes; and
(5) the amount of excess account balances to be distributed
under section 16 of this chapter.
(d) The budget agency shall certify an amount less than the
amount determined under subsection (b) if the budget agency
determines that the reduced distribution is necessary to offset
overpayments made in a calendar year before the calendar year of
the distribution. The budget agency may reduce the amount of the
certified distribution over several calendar years so that any
overpayments are offset over several years rather than in one (1)
lump sum.
(e) The budget agency shall adjust the certified distribution of
a municipality to correct for any clerical or mathematical errors
made in any previous certification under this section. The budget
agency may reduce the amount of the certified distribution over
several calendar years so that any adjustment under this
subsection is offset over several years rather than in one (1) lump
sum.
(f) This subsection applies to a municipality that:
(1) initially imposes the municipal option income tax; or
(2) increases the municipal option income tax rate;
under this chapter in the same calendar year in which the budget
agency makes a certification under this section. The budget agency
shall adjust the certified distribution of a municipality to provide
for a distribution in the immediately following calendar year and
in each calendar year thereafter. The budget agency shall provide
for a full transition to certification of distributions as provided in
subsection (b)(1) through (b)(2).
(g) On the first business day in May of each year, one-half (1/2)
of each municipality's certified distribution for the calendar year
shall be distributed from its account to the municipality's fiscal
officer. The other one-half (1/2) shall be distributed on the first
business day in November of that calendar year.
Sec. 16. (a) A special account within the state general fund shall
be established for each municipality adopting a municipal option
income tax. Revenue derived from the imposition of the municipal
option income tax shall be deposited in that municipality's special
account in the state general fund. Money in the special account is
appropriated to make the distributions required by this chapter.
(b) Income earned on money held in a municipality's special
account under subsection (a) becomes a part of that account.
(c) Revenue remaining in a municipality's special account at the
end of a state fiscal year does not revert to any other account in the
state general fund.
(d) Before October 2 of each year, the department shall submit
a report to each municipality's fiscal officer indicating the balance
in the municipality's special account as of the cutoff date set by the
budget agency.
(e) If the budget agency determines that a sufficient balance
exists in a municipality's account that exceeds the amount
necessary, when added to other money that will be deposited in the
account after the date of the determination, to make certified
distributions to the municipality in the ensuing year, the budget
agency shall make a supplemental distribution to the municipality
from the municipality's special account. A determination under
this subsection must be made before October 2.
(f) A supplemental distribution described in subsection (e) must
be:
(1) made in January of the following calendar year; and
(2) allocated in the same manner as certified distributions for
deposit in a municipality's rainy day fund established under
IC 36-1-8-5.1.
Sec. 17. A municipality may use distributions received under
this chapter to provide property tax relief for property owners in
the municipality using any combination of the following:
(1) Freezing the municipality's levy in an amount determined
under IC 6-3.5-1.5-4.
(2) Providing local property tax replacement credits at a
uniform rate to all taxpayers located in the municipality.
(3) Providing local homestead credits to all homesteads located in the municipality.
(4) Providing local property tax replacement credits at a uniform rate for all qualified residential property (as defined in IC 6-3.5-6-1) located in the municipality.
Sec. 18. (a) For purposes of this chapter, an individual shall be treated as a municipal taxpayer of the municipality in which the individual:
(1) maintains a residence, if the individual maintains only one (1) residence in Indiana;
(2) if subdivision (1) does not apply, registers to vote;
(3) if subdivisions (1) and (2) do not apply, registers the individual's personal automobile; or
(4) if subdivisions (1), (2), and (3) do not apply, spends the majority of the individual's time in Indiana during the taxable year in question.
(b) Whether an individual is a municipal taxpayer is determined on January 1 of the calendar year in which the individual's taxable year commences. If an individual changes the location of the individual's residence to another location in Indiana during a calendar year, the individual's liability for municipal option income tax is not affected.
Sec. 19. If a municipal option income tax is not in effect during an individual taxpayer's entire taxable year, the amount of municipal option income tax that the taxpayer owes for that taxable year equals the product of:
(1) the amount of the municipal option income tax the taxpayer would owe if the tax had been imposed during the taxpayer's entire taxable year; multiplied by
(2) a fraction, of which:
(A) the numerator equals the number of days during the taxpayer's taxable year that the municipal option income tax was in effect; and
(B) the denominator equals the total number of days in the taxpayer's taxable year.
Sec. 20. (a) If, for a particular taxable year, a municipal taxpayer is allowed, or a municipal taxpayer and the municipal taxpayer's spouse who file a joint return are allowed, a credit for the elderly or the totally disabled under Section 22 of the Internal Revenue Code, the municipal taxpayer is entitled, or the municipal taxpayer and the municipal taxpayer's spouse are entitled, to a credit against their municipal option income tax liability for that
same taxable year. The amount of the credit equals the lesser of the
following:
(1) The product of:
(A) the credit for the elderly or the totally disabled for the
same taxable year; multiplied by
(B) a fraction, of which:
(i) the numerator is the municipal option income tax rate
imposed against the municipal taxpayer or the municipal
taxpayer and the municipal taxpayer's spouse; and
(ii) the denominator is fifteen-hundredths (0.15).
(2) The amount of municipal option income tax imposed on
the municipal taxpayer or the municipal taxpayer and the
municipal taxpayer's spouse.
(b) If a municipal taxpayer and the municipal taxpayer's spouse
file a joint return and are subject to different municipal option
income tax rates for the same taxable year, they shall compute the
credit under this section by using the formula provided in
subsection (a), except that they shall use the average of the two (2)
tax rates imposed against them as the numerator referred to in
subsection (a)(1)(B).
Sec. 21. If, for any taxable year, a municipal taxpayer is subject
to different tax rates for the municipal option income tax imposed
by a municipality, the taxpayer's municipal option income tax rate
for that municipality and that taxable year is the rate determined
in the last STEP of the following STEPS:
STEP ONE: Multiply the number of months in the taxpayer's
taxable year that precede July 1 by the rate in effect before
the rate change.
STEP TWO: Multiply the number of months in the taxpayer's
taxable year that follow June 30 by the rate in effect after the
rate change.
STEP THREE: Divide the sum of the amounts determined
under STEPS ONE and TWO by twelve (12).
Sec. 22. (a) Except as otherwise provided in this chapter, all
provisions of the adjusted gross income tax law (IC 6-3)
concerning:
(1) definitions;
(2) declarations of estimated tax;
(3) filing of returns;
(4) remittances;
(5) incorporation of the provisions of the Internal Revenue
Code;
(6) penalties and interest;
(7) exclusion of military pay credits for withholding; and
(8) exemptions and deductions;
apply to the imposition, collection, and administration of the municipal option income tax. The municipal option income tax is a listed tax and an income tax for purposes of IC 6-8.1.
(b) IC 6-3-1-3.5(a)(5), IC 6-3-3-3, IC 6-3-3-5, and IC 6-3-5-1 do not apply to the municipal option income tax.
(c) Each employer shall report to the department the amount of withholdings attributable to the municipal taxpayers for each municipality in which the municipal option income tax is in effect. This report shall be submitted annually with the employer's withholding report.
vehicles (IC 9-20-3 and IC 9-30); the fees and penalties assessed for
overweight vehicles (IC 9-20-4 and IC 9-30); the underground storage
tank fee (IC 13-23); the solid waste management fee (IC 13-20-22);
and any other tax or fee that the department is required to collect or
administer.
(1) The due date of the return.
(2) In the case of a return filed for the state gross retail or use tax, the gasoline tax, the special fuel tax, the motor carrier fuel tax, the oil inspection fee, or the petroleum severance tax, the end of the calendar year which contains the taxable period for which the return is filed.
(b) If a person files a utility receipts tax return (IC 6-2.3), an adjusted gross income tax (IC 6-3), supplemental net income tax (IC 6-3-8) (repealed), county adjusted gross income tax (IC 6-3.5-1.1), county option income tax (IC 6-3.5-6), municipal option income tax (IC 6-3.5-10), or financial institutions tax (IC 6-5.5) return that understates the person's income, as that term is defined in the particular income tax law, by at least twenty-five percent (25%), the proposed assessment limitation is six (6) years instead of the three (3) years provided in subsection (a).
(c) In the case of the motor vehicle excise tax (IC 6-6-5), the tax shall be assessed as provided in IC 6-6-5-5 and IC 6-6-5-6 and shall include the penalties and interest due on all listed taxes not paid by the due date. A person that fails to properly register a vehicle as required by IC 9-18 and pay the tax due under IC 6-6-5 is considered to have failed to file a return for purposes of this article.
(d) In the case of the commercial vehicle excise tax imposed under IC 6-6-5.5, the tax shall be assessed as provided in IC 6-6-5.5 and shall include the penalties and interest due on all listed taxes not paid by the due date. A person that fails to properly register a commercial vehicle as required by IC 9-18 and pay the tax due under IC 6-6-5.5 is considered to have failed to file a return for purposes of this article.
(e) In the case of the excise tax imposed on recreational vehicles and truck campers under IC 6-6-5.1, the tax shall be assessed as provided in IC 6-6-5.1 and must include the penalties and interest due on all listed taxes not paid by the due date. A person who fails to
properly register a recreational vehicle as required by IC 9-18 and pay
the tax due under IC 6-6-5.1 is considered to have failed to file a return
for purposes of this article. A person who fails to pay the tax due under
IC 6-6-5.1 on a truck camper is considered to have failed to file a return
for purposes of this article.
(f) If a person files a fraudulent, unsigned, or substantially blank
return, or if a person does not file a return, there is no time limit within
which the department must issue its proposed assessment.
(g) If any part of a listed tax has been erroneously refunded by the
department, the erroneous refund may be recovered through the
assessment procedures established in this chapter. An assessment
issued for an erroneous refund must be issued:
(1) within two (2) years after making the refund; or
(2) within five (5) years after making the refund if the refund was
induced by fraud or misrepresentation.
(h) If, before the end of the time within which the department may
make an assessment, the department and the person agree to extend
that assessment time period, the period may be extended according to
the terms of a written agreement signed by both the department and the
person. The agreement must contain:
(1) the date to which the extension is made; and
(2) a statement that the person agrees to preserve the person's
records until the extension terminates.
The department and a person may agree to more than one (1) extension
under this subsection.
(i) If a taxpayer's federal income tax liability for a taxable year is
modified due to the assessment of a federal deficiency or the filing of
an amended federal income tax return, then the date by which the
department must issue a proposed assessment under section 1 of this
chapter for tax imposed under IC 6-3 is extended to six (6) months after
the date on which the notice of modification is filed with the
department by the taxpayer.
(1) identifies the total number of individual taxpayers that live within a particular incorporated city or town;
(2) identifies the total individual adjusted gross income of those taxpayers; and
(3) includes any other information that:
(A) can be abstracted from the taxpayers' individual income tax returns; and
(B) is necessary to obtain information concerning individual income taxation under IC 6-3.5-1.1, IC 6-3.5-6,
as agreed to by the department and the legislative services agency.
(b) As used in this subsection, "authorized agency" refers to the legislative services agency or the budget agency. As used in this subsection, "director" refers to the executive director of the legislative services agency or the director of the budget agency. The department shall provide access to the information described in subsection (a) in electronic format to an authorized agency:
(1) upon receipt of a written request from the director of the authorized agency; and
(2) upon the director's agreement that any information accessed (other than aggregate data) will be kept confidential and used solely for official purposes.
